[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3145 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 3145

To modify the provisions of the Balanced Budget Act of 1997 relating to 
   the Medicare Program under title XVIII of the Social Security Act.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 26, 1999

   Mr. Rush introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committees on 
Commerce, and the Judiciary, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To modify the provisions of the Balanced Budget Act of 1997 relating to 
   the Medicare Program under title XVIII of the Social Security Act.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; TABLE OF 
              CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Care 
Preservation and Accessibility Act of 1999''.
    (b) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this Act an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; amendments to Social Security Act; table of 
                            contents.
                      TITLE I--TEACHING HOSPITALS

Sec. 101. Termination of multiyear reduction of indirect graduate 
                            medical education payments.
Sec. 102. Program of payments to children's hospitals that operate 
                            graduate medical education programs.
Sec. 103. Exclusion of nursing and allied health education costs in 
                            calculating Medicare+Choice payment rate.
                       TITLE II--RURAL HOSPITALS

Sec. 201. Revision of criteria for designation as a critical access 
                            hospital.
Sec. 202. Authority to establish a prospective payment system for RHC 
                            services.
Sec. 203. Requirement to consider rural issues in establishing fee 
                            schedule for ambulance services.
Sec. 204. Stop-loss protection for rural hospital OPD services.
                    TITLE III--SAFETY NET PROVIDERS

Sec. 301. New prospective payment system for Federally-qualified health 
                            centers and rural health clinics under the 
                            Medicaid Program.
Sec. 302. Carving out DSH payments from payments to Medicare+Choice 
                            organizations and paying the amounts 
                            directly to DSH hospitals enrolling 
                            Medicare+Choice enrollees.
Sec. 303. Limitation in reduction of payments to disproportionate share 
                            hospitals.
                  TITLE IV--OTHER HOSPITAL PROVISIONS

Sec. 401. Delay of financial limitation on rehabilitation services.
Sec. 402. Multiyear transition to prospective payment system for 
                            hospital outpatient department services.
                  TITLE V--SKILLED NURSING FACILITIES

Sec. 501. Modification of case mix categories for certain conditions.
Sec. 502. Exclusion of ambulance services to and from dialysis 
                            treatments and prosthetic services from the 
                            PPS for SNFs.
Sec. 503. Waiver of 3-day prior hospitalization requirement for 
                            coverage of skilled nursing facility 
                            services.
Sec. 504. Extension of certain Medicare community nursing organization 
                            demonstration projects.
             TITLE VI--COST-EFFICIENT HOME HEALTH PROVIDERS

Sec. 601. Delay in contingency reduction.
Sec. 602. Elimination of 15-minute reporting requirement.
Sec. 603. Recoupment of overpayments.
Sec. 604. Increase in per visit limit.
TITLE VII--MEDICARE+CHOICE AND MEDIGAP PROTECTIONS FOR SENIORS AND THE 
                                DISABLED

Sec. 701. Two-year Medicare+Choice trial period.
Sec. 702. Permitting enrollment in alternative plans upon receipt of 
                            notice of Medicare+Choice plan termination.
Sec. 703. Guaranteed issuance of certain Medigap policies in cases of a 
                            substantial change in benefits under a 
                            Medicare+Choice plan.
Sec. 704. Guaranteed issuance of certain Medigap policies to disabled 
                            Medicare+Choice disenrollees.
Sec. 705. Issuance of same Medigap benefit package guaranteed for 
                            certain Medicare+Choice disenrollees.
Sec. 706. Prohibition of attained-age rating of premiums for Medigap 
                            policies.
       TITLE VIII--MEDICARE PRESERVATION THROUGH FRAUD PREVENTION

Sec. 801. Site inspections and background checks.
Sec. 802. Registration of billing agencies.
Sec. 803. Expanded access to the health integrity protection database 
                            (HIPDB).
Sec. 804. Liability of Medicare carriers and fiscal intermediaries for 
                            claims submitted by excluded providers.
Sec. 805. Community mental health centers.
Sec. 806. Limiting the discharge of debts in bankruptcy proceedings in 
                            cases where a health care provider or a 
                            supplier engages in fraudulent activity.
Sec. 807. Illegal distribution of a Medicare or Medicaid beneficiary 
                            identification or provider number.
Sec. 808. Treatment of certain Social Security Act crimes as Federal 
                            health care offenses.
Sec. 809. Authority of Office of Inspector General of the Department of 
                            Health and Human Services.
Sec. 810. Universal product numbers on claims forms for reimbursement 
                            under the Medicare Program.

                      TITLE I--TEACHING HOSPITALS

SEC. 101. TERMINATION OF MULTIYEAR REDUCTION OF INDIRECT GRADUATE 
              MEDICAL EDUCATION PAYMENTS.

    Section 1886(d)(5)(B)(ii) (42 U.S.C. 1395ww(d)(5)(B)(ii)) is 
amended--
            (1) by adding ``and'' at the end of subclause (II); and
            (2) by striking subclauses (III), (IV), and (V) and 
        inserting the following:
                                    ``(III) on or after October 1, 
                                1998, `c' is equal to 1.6.''.

SEC. 102. PROGRAM OF PAYMENTS TO CHILDREN'S HOSPITALS THAT OPERATE 
              GRADUATE MEDICAL EDUCATION PROGRAMS.

    (a) Payments.--The Secretary shall make two payments under this 
section to each children's hospital for each of fiscal years 2000 and 
2001, one for the direct expenses and the other for indirect expenses 
associated with operating approved graduate medical residency training 
programs.
    (b) Amount of Payments.--
            (1) In general.--Subject to paragraph (2), the amounts 
        payable under this section to a children's hospital for an 
        approved graduate medical residency training program for a 
fiscal year are each of the following amounts:
                    (A) Direct expense amount.--The amount determined 
                under subsection (c) for direct expenses associated 
                with operating approved graduate medical residency 
                training programs.
                    (B) Indirect expense amount.--The amount determined 
                under subsection (d) for indirect expenses associated 
                with the treatment of more severely ill patients and 
                the additional costs relating to teaching residents in 
                such programs.
            (2) Capped amount.--
                    (A) In general.--The total of the payments made to 
                children's hospitals under paragraph (1)(A) or 
                paragraph (1)(B) in a fiscal year shall not exceed the 
                funds appropriated under paragraph (1) or (2), 
                respectively, of subsection (f) for such payments for 
                that fiscal year.
                    (B) Pro rata reductions of payments for direct 
                expenses.--If the Secretary determines that the amount 
                of funds appropriated under subsection (f)(1) for a 
                fiscal year is insufficient to provide the total amount 
                of payments otherwise due for such periods under 
                paragraph (1)(A), the Secretary shall reduce the 
                amounts so payable on a pro rata basis to reflect such 
                shortfall.
    (c) Amount of Payment for Direct Graduate Medical Education.--
            (1) In general.--The amount determined under this 
        subsection for payments to a children's hospital for direct 
        graduate expenses relating to approved graduate medical 
        residency training programs for a fiscal year is equal to the 
        product of--
                    (A) the updated per resident amount for direct 
                graduate medical education, as determined under 
                paragraph (2)); and
                    (B) the average number of full-time equivalent 
                residents in the hospital's graduate approved medical 
                residency training programs (as determined under 
                section 1886(h)(4) of the Social Security Act (42 
                U.S.C. 1395ww(h)(4))) during the fiscal year.
            (2) Updated per resident amount for direct graduate medical 
        education.--The updated per resident amount for direct graduate 
        medical education for a hospital for a fiscal year is an amount 
        determined as follows:
                    (A) Determination of hospital single per resident 
                amount.--The Secretary shall compute for each hospital 
                operating an approved graduate medical education 
                program (regardless of whether or not it is a 
                children's hospital) a single per resident amount equal 
                to the average (weighted by number of full-time 
                equivalent residents) of the primary care per resident 
                amount and the non-primary care per resident amount 
                computed under section 1886(h)(2) of the Social 
                Security Act for cost reporting periods ending during 
                fiscal year 1997.
                    (B) Determination of wage and non-wage-related 
                proportion of the single per resident amount.--The 
                Secretary shall estimate the average proportion of the 
                single per resident amounts computed under subparagraph 
                (A) that is attributable to wages and wage-related 
                costs.
                    (C) Standardizing per resident amounts.--The 
                Secretary shall establish a standardized per resident 
                amount for each such hospital--
                            (i) by dividing the single per resident 
                        amount computed under subparagraph (A) into a 
                        wage-related portion and a non-wage-related 
                        portion by applying the proportion determined 
                        under subparagraph (B);
                            (ii) by dividing the wage-related portion 
                        by the factor applied under section 
                        1886(d)(3)(E) of the Social Security Act (42 
                        U.S.C. 1395ww(d)(3)(E)) for discharges 
                        occurring during fiscal year 1999 for the 
                        hospital's area; and
                            (iii) by adding the non-wage-related 
                        portion to the amount computed under clause 
                        (ii).
                    (D) Determination of national average.--The 
                Secretary shall compute a national average per resident 
                amount equal to the average of the standardized per 
                resident amounts computed under subparagraph (C) for 
                such hospitals, with the amount for each hospital 
                weighted by the average number of full-time equivalent 
                residents at such hospital.
                    (E) Application to individual hospitals.--The 
                Secretary shall compute for each such hospital that is 
                a children's hospital a per resident amount--
                            (i) by dividing the national average per 
                        resident amount computed under subparagraph (D) 
                        into a wage-related portion and a non-wage-
                        related portion by applying the proportion 
                        determined under subparagraph (B);
                            (ii) by multiplying the wage-related 
                        portion by the factor described in subparagraph 
                        (C)(ii) for the hospital's area; and
                            (iii) by adding the non-wage-related 
                        portion to the amount computed under clause 
                        (ii).
                    (F) Updating rate.--The Secretary shall update such 
                per resident amount for each such children's hospital 
                by the estimated percentage increase in the consumer 
                price index for all urban consumers during the period 
                beginning October 1997 and ending with the midpoint of 
                the hospital's cost reporting period that begins during 
                fiscal year 2000.
    (d) Amount of Payment for Indirect Medical Education.--
            (1) In general.--The amount determined under this 
        subsection for payments to a children's hospital for indirect 
        expenses associated with the treatment of more severely ill 
        patients and the additional costs related to the teaching of 
        residents for a fiscal year is equal to an amount determined 
        appropriate by the Secretary.
            (2) Factors.--In determining the amount under paragraph 
        (1), the Secretary shall--
                    (A) take into account variations in case mix among 
                children's hospitals and the number of full-time 
                equivalent residents in the hospitals' approved 
                graduate medical residency training programs; and
                    (B) assure that the aggregate of the payments for 
                indirect expenses associated with the treatment of more 
                severely ill patients and the additional costs related 
                to the teaching of residents under this section in a 
                fiscal year are equal to the amount appropriated for 
                such expenses for the fiscal year involved under 
                subsection (f)(2).
    (e) Making of Payments.--
            (1) Interim payments.--The Secretary shall determine, 
        before the beginning of each fiscal year involved for which 
        payments may be made for a hospital under this section, the 
        amounts of the payments for direct graduate medical education 
        and indirect medical education for such fiscal year and shall 
        (subject to paragraph (2)) make the payments of such amounts in 
        26 equal interim installments during such period.
            (2) Withholding.--The Secretary shall withhold up to 25 
        percent from each interim installment for direct graduate 
        medical education paid under paragraph (1).
            (3) Reconciliation.--At the end of each fiscal year for 
        which payments may be made under this section, the hospital 
        shall submit to the Secretary such information as the Secretary 
        determines to be necessary to determine the percent (if any) of 
        the total amount withheld under paragraph (2) that is due under 
        this section for the hospital for the fiscal year. Based on 
        such determination, the Secretary shall recoup any overpayments 
        made, or pay any balance due. The amount so determined shall be 
        considered a final intermediary determination for purposes of 
        applying section 1878 of the Social Security Act (42 U.S.C. 
        1395oo) and shall be subject to review under that section in 
        the same manner as the amount of payment under section 1886(d) 
        of such Act (42 U.S.C. 1395ww(d)) is subject to review under 
        such section.
    (f) Authorization of Appropriations.--
            (1) Direct graduate medical education.--
                    (A) In general.--There are hereby authorized to be 
                appropriated, out of any money in the Treasury not 
                otherwise appropriated, for payments under subsection 
                (b)(1)(A)--
                            (i) for fiscal year 2000, $90,000,000; and
                            (ii) for fiscal year 2001, $95,000,000.
                    (B) Carryover of excess.--The amounts appropriated 
                under subparagraph (A) for fiscal year 2000 shall 
                remain available for obligation through the end of 
                fiscal year 2001.
            (2) Indirect medical education.--There are hereby 
        authorized to be appropriated, out of any money in the Treasury 
        not otherwise appropriated, for payments under subsection 
        (b)(1)(A)--
                    (A) for fiscal year 2000, $190,000,000; and
                    (B) for fiscal year 2001, $190,000,000.
    (f) Relation to Medicare and Medicaid Payments.--Notwithstanding 
any other provision of law, payments under this section to a hospital 
for fiscal years 2000 and 2001--
            (1) are in lieu of any amounts otherwise payable to the 
        hospital under section 1886(h) or 1886(d)(5)(B) of the Social 
        Security Act (42 U.S.C. 1395ww(h); 1395ww(d)(5)B)) for portions 
        of cost reporting periods occurring during such fiscal years; 
        but
            (2) shall not affect the amounts otherwise payable to such 
        hospitals under a State medicaid plan under title XIX of such 
        Act (42 U.S.C. 1396 et seq.).
    (g) Definitions.--In this section:
            (1) Approved graduate medical residency training program.--
        The term ``approved graduate medical residency training 
        program'' has the meaning given the term ``approved medical 
        residency training program'' in section 1886(h)(5)(A) of the 
        Social Security Act (42 U.S.C. 1395ww(h)(5)(A)).
            (2) Children's hospital.--The term ``children's hospital'' 
        means a hospital described in section 1886(d)(1)(B)(iii) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iii)).
            (3) Direct graduate medical education costs.--The term 
        ``direct graduate medical education costs'' has the meaning 
        given such term in section 1886(h)(5)(C) of the Social Security 
        Act (42 U.S.C. 1395ww(h)(5)(C)).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 103. EXCLUSION OF NURSING AND ALLIED HEALTH EDUCATION COSTS IN 
              CALCULATING MEDICARE+CHOICE PAYMENT RATE.

    (a) Excluding Costs in Calculating Payment Rate.--
            (1) In general.--Section 1853(c)(3)(C)(i) (42 U.S.C. 1395w-
        23(c)(3)(C)(i)) is amended--
                    (A) by striking ``and'' at the end of subclause 
                (I);
                    (B) by striking the period at the end of subclause 
                (II) and inserting ``, and''; and
                    (C) by adding at the end the following:
                                    ``(III) for costs attributable to 
                                approved nursing and allied health 
                                education programs under section 
                                1861(v).''.
            (2) Effective date.--The amendments made by paragraph (1) 
        apply in determining the annual per capita rate of payment for 
        years beginning with 2001.
    (b) Payment to Hospitals of Nursing and Allied Health Education 
Program Costs for Medicare+Choice Enrollees.--Section 1861(v)(1) of 
such Act (42 U.S.C. 1395x(v)(1)) is amended by adding at the end the 
following:
    ``(V) In determining the amount of payment to a hospital for cost 
reporting periods (or portions thereof) occurring on or after January 
1, 2001, with respect to the reasonable costs for approved nursing and 
allied health education programs, individuals who are enrolled with a 
Medicare+Choice organization under part C shall be treated as if they 
were not so enrolled.''.

                       TITLE II--RURAL HOSPITALS

SEC. 201. REVISION OF CRITERIA FOR DESIGNATION AS A CRITICAL ACCESS 
              HOSPITAL.

    (a) Conversion of Downsized or Recently Closed Hospitals to 
Critical Access Hospitals.--Section 1820(c)(2) (42 U.S.C. 1395i-
4(c)(2)) is amended--
            (1) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B), (C), (D), and (E)''; and
            (2) by adding at the end the following:
                    ``(C) Recently closed facilities.--A State may 
                designate a facility as a critical access hospital if 
                the facility--
                            ``(i) was a nonprofit or public hospital 
                        that ceased operations within the 3-year period 
                        ending on the date of enactment of the Health 
                        Care Preservation Act of 1999; and
                            ``(ii) as of the effective date of such 
                        designation, meets the criteria for designation 
                        under subparagraph (B).
                    ``(D) Downsized facilities.--A State may designate 
                a health clinic or a health center (as defined by the 
                State) as a critical access hospital if such clinic or 
                center--
                            ``(i) is licensed by the State as a health 
                        clinic or a health center if the State requires 
                        such licensure in order to operate as a health 
                        clinic or health center;
                            ``(ii) was a nonprofit or public hospital 
                        that was downsized to a health clinic or health 
                        center; and
                            ``(iii) as of the effective date of such 
                        designation, meets the criteria for designation 
                        under subparagraph (B).
                    ``(E) Federally-qualified health center.--A State 
                may designate a Federally-qualified health center (as 
                defined in section 1905(l)(2)(B)) as a critical access 
                hospital if such center--
                            ``(i) operates a laboratory that has in 
                        effect a certificate issued under section 353 
                        of the Public Health Service Act that permits 
                        such laboratory to perform tests categorized as 
                        high complexity;
                            ``(ii) operates a radiology department; and
                            ``(iii) as of the effective date of such 
                        designation, meets the criteria for designation 
                        under subparagraph (B).''.
    (b) Revision of Criteria for Designation as a Critical Access 
Hospital.--Section 1820(c)(2)(B)(iii) (42 U.S.C. 1395i-4(c)(2)(B)(iii)) 
is amended by striking ``not to exceed 96 hours'' and all that follows 
to the semicolon and inserting ``not to exceed, on average, 96 hours 
per patient''.
    (c) Effective Date.--The amendments made by this section take 
effect on the date of enactment of this Act.

SEC. 202. AUTHORITY TO ESTABLISH A PROSPECTIVE PAYMENT SYSTEM FOR RHC 
              SERVICES.

    (a) Establishment of System.--Section 1833 (42 U.S.C. 1395l) is 
amended by adding at the end the following:
    ``(u) Authority To Establish Prospective Payment System for Rural 
Health Clinic Services.--
            ``(1) In general.--Notwithstanding subsections (a)(3) and 
        (f), the Secretary may establish by regulation a prospective 
        payment system for rural health clinic services (except for 
        such services provided by a rural health clinic located in a 
        rural hospital with less than 50 beds).
            ``(2) Budget neutral payments.--If the Secretary 
        establishes a prospective payment system pursuant to paragraph 
        (1), the Secretary shall establish the initial payment levels 
        under such system in a manner that results in aggregate 
        payments (including payments by individuals to whom services 
        are provided) for the first year, as estimated by the 
        Secretary, approximately equal to the aggregate payments that 
        would have otherwise been made under this part.''.
    (b) Conforming Amendments.--
            (1) Payment.--Section 1833(a)(3) (42 U.S.C. 1395l(a)(3)) is 
        amended by inserting ``subject to subsection (u),'' before ``in 
        the case''.
            (2) Limits.--Section 1833(f) (42 U.S.C. 1395l(f)) is 
        amended by striking ``In establishing'' and inserting ``Subject 
        to subsection (u), in establishing''.
            (3) Requirement for rural health clinics.--Clause (ii) of 
        the second sentence of section 1861(aa)(2) (42 U.S.C. 
        1395x(aa)(2)) is amended by inserting ``(and section 1833(u) if 
        the Secretary implements a prospective payment system under 
        that section)'' after ``section 1833''.

SEC. 203. REQUIREMENT TO CONSIDER RURAL ISSUES IN ESTABLISHING FEE 
              SCHEDULE FOR AMBULANCE SERVICES.

    (a) In General.--Section 1834(l)(2)(C) (42 U.S.C. 1395m(l)(2)(C)) 
is amended by inserting ``, including differences in rural and non-
rural areas'' after ``differences''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect as if included in the enactment of the Balanced Budget Act of 
1997 (Public Law 105-33; 111 Stat. 251).

SEC. 204. STOP-LOSS PROTECTION FOR RURAL HOSPITAL OPD SERVICES.

    (a) In General.--Section 1833(t)(10)(D)(i) (42 U.S.C. 
1395l(t)(10)(D)(i)) (as added by section 402) is amended by adding at 
the end the following:
                        ``The applicable percentage shall be 100 
                        percent with respect to covered OPD services 
                        furnished during a transition year in a rural 
                        hospital.''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect as if included in the amendments made by section 4523 of the 
Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 445).

                    TITLE III--SAFETY NET PROVIDERS

SEC. 301. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDERALLY-QUALIFIED HEALTH 
              CENTERS AND RURAL HEALTH CLINICS UNDER THE MEDICAID 
              PROGRAM.

    (a) In General.--Section 1902(a)(13) (42 U.S.C. 1396a(a)(13)) is 
amended--
            (1) in subparagraph (A), by adding ``and'' at the end;
            (2) in subparagraph (B), by striking ``and'' at the end; 
        and
            (3) by striking subparagraph (C).
    (b) New Prospective Payment System.--Section 1902 (42 U.S.C. 1396a) 
is amended by adding at the end the following:
    ``(aa) Payment for Services Provided by Federally-Qualified Health 
Centers and Rural Health Clinics.--
            ``(1) In general.--Beginning with fiscal year 2000 and each 
        succeeding fiscal year, the State plan shall provide for 
        payment for services described in section 1905(a)(2)(C) 
        furnished by a Federally-qualified health center and services 
        described in section 1905(a)(2)(B) furnished by a rural health 
        clinic in accordance with the provisions of this subsection.
            ``(2) Fiscal year 2000.--For fiscal year 2000, the State 
        plan shall provide for payment for such services in an amount 
        (calculated on a per visit basis) that is equal to 100 percent 
        of the costs incurred by the center or clinic in furnishing 
        such services during fiscal year 1999 which are reasonable and 
        related to the cost of furnishing such services, or based on 
        such other tests of reasonableness as the Secretary prescribes 
        in regulations under section 1833(a)(3), or in the case of 
        services to which such regulations do not apply, the same 
        methodology used under section 1833(a)(3), adjusted to take 
        into account any increase in the scope of such services 
        furnished by the center or clinic during fiscal year 2000.
            ``(3) Fiscal year 2001 and succeeding years.--For fiscal 
        year 2001 and each succeeding fiscal year, the State plan shall 
        provide for payment for such services in an amount (calculated 
        on a per visit basis) that is equal to the amount calculated 
        for such services under this subsection for the preceding 
        fiscal year--
                    ``(A) increased by the percentage increase in the 
                MEI (Medicare economic index) (as defined in section 
                1842(i)(3)) applicable to primary care services (as 
                defined in section 1842(i)(4)) for that fiscal year; 
                and
                    ``(B) adjusted to take into account any increase in 
                the scope of such services furnished by the center or 
                clinic during that fiscal year.
            ``(4) Establishment of initial year payment amount for new 
        centers or clinics.--In any case in which an entity first 
        qualifies as a Federally-qualified health center or rural 
        health clinic after October 1, 2000, the State plan shall 
        provide for payment for services described in section 
        1905(a)(2)(C) furnished by the center or services described in 
        section 1905(a)(2)(B) furnished by the clinic in the first 
        fiscal year in which the center or clinic qualifies in an 
        amount (calculated on a per visit basis) that is equal to 100 
        percent of the costs of furnishing such services during such 
        fiscal year in accordance with the regulations and methodology 
        referred to in paragraph (2). For each fiscal year following 
        the fiscal year in which the entity first qualifies as a 
        Federally-qualified health center or rural health clinic, the 
        State plan shall provide for the payment amount to be 
        calculated in accordance with paragraph (3) of this subsection.
            ``(5) Administration in the case of managed care.--In the 
        case of services furnished by a Federally-qualified health 
        center or rural health clinic pursuant to a contract between 
        the center or clinic and a managed care entity (as defined in 
        section 1932(a)(1)(B)), the State plan shall provide for 
        payment to the center or clinic (at least quarterly) by the 
        State of a supplemental payment equal to the amount (if any) by 
        which the amount determined under paragraphs (2), (3), and (4) 
        of this subsection exceeds the amount of the payments provided 
        under the contract.
            ``(6) Alternative payment system.--Notwithstanding any 
        other provision of this section, the State plan may provide for 
        payment in any fiscal year to a Federally-qualified health 
        center (as defined in section 1905(l)(2)(B)) for services 
        described in section 1905(a)(2)(C) or to a rural health clinic 
        for services described in section 1905(a)(2)(B) in an amount 
        that is in excess of the amount otherwise required to be paid 
        to the center or clinic under this subsection.''.
    (c) Conforming Amendments.--
            (1) Section 4712 of the Balanced Budget Act of 1997 (Public 
        Law 105-33; 111 Stat. 508) is amended by striking subsection 
        (c).
            (2) Section 1915(b) (42 U.S.C. 1396n(b)) is amended by 
        striking ``1902(a)(13)(E)'' and inserting ``1902(aa)''.
    (d) Effective Date.--The amendments made by this section take 
effect on October 1, 1999.

SEC. 302. CARVING OUT DSH PAYMENTS FROM PAYMENTS TO MEDICARE+CHOICE 
              ORGANIZATIONS AND PAYING THE AMOUNTS DIRECTLY TO DSH 
              HOSPITALS ENROLLING MEDICARE+CHOICE ENROLLEES.

    (a) In General.--Section 1853(c)(3) (42 U.S.C. 1395w-23(c)(3)) is 
amended--
            (1) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B) and (D)'';
            (2) by redesignating subparagraph (D) as subparagraph (E); 
        and
            (3) by inserting after subparagraph (C) the following:
                    ``(D) Removal of payments attributable to 
                disproportionate share payments from calculation of 
                adjusted average per capita cost.--
                            ``(i) In general.--In determining the area-
                        specific Medicare+Choice capitation rate under 
                        subparagraph (A) for a year (beginning with 
                        2001), the annual per capita rate of payment 
                        for 1997 determined under section 1876(a)(1)(C) 
                        shall be adjusted, subject to clause (ii), to 
                        exclude from the rate the additional payments 
                        that the Secretary estimates were made during 
                        1997 for additional payments described in 
                        section 1886(d)(5)(F).
                            ``(ii) Treatment of payments covered under 
                        state hospital reimbursement system.--To the 
                        extent that the Secretary estimates that an 
                        annual per capita rate of payment for 1997 
                        described in clause (i) reflects payments to 
                        hospitals reimbursed under section 1814(b)(3), 
                        the Secretary shall estimate a payment 
                        adjustment that is comparable to the payment 
                        adjustment that would have been made under 
                        clause (i) if the hospitals had not been 
                        reimbursed under such section.''.
    (b) Additional Payments for Managed Care Enrollees.--Section 
1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is amended--
            (1) in clause (ii), by striking ``clause (ix)'' and 
        inserting ``clauses (ix) and (x)''; and
            (2) by adding at the end the following:
    ``(x)(I) For cost reporting periods (or portions thereof) occurring 
on or after January 1, 2001, the Secretary shall provide for an 
additional payment amount for each applicable discharge of any 
subsection (d) hospital that is a disproportionate share hospital (as 
described in clause (i)).
    ``(II) For purposes of this clause, the term `applicable discharge' 
means the discharge of any individual who is enrolled with a 
Medicare+Choice organization under part C.
    ``(III) The amount of the payment under this clause with respect to 
any applicable discharge shall be equal to the estimated average per 
discharge amount (as determined by the Secretary) that would otherwise 
have been paid under this subparagraph if the individual had not been 
enrolled as described in subclause (II).
    ``(IV) The Secretary shall establish rules for an additional 
payment amount for any hospital reimbursed under a reimbursement system 
authorized under section 1814(b)(3) if such hospital would qualify as a 
disproportionate share hospital under clause (i) were it not so 
reimbursed. Such payment shall be determined in the same manner as the 
amount of payment is determined under this clause for disproportionate 
share hospitals.''.

SEC. 303. LIMITATION IN REDUCTION OF PAYMENTS TO DISPROPORTIONATE SHARE 
              HOSPITALS.

    (a) In General.--Section 1886(d)(5)(F)(ix) (42 U.S.C. 
1395ww(d)(5)(F)(ix)) is amended--
            (1) in subclause (IV), by striking ``4'' and inserting 
        ``3''; and
            (2) in subclause (V), by striking ``5'' and inserting 
        ``3''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect as if included in the amendments made by section 4403 of the 
Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 398).

                  TITLE IV--OTHER HOSPITAL PROVISIONS

SEC. 401. DELAY OF FINANCIAL LIMITATION ON REHABILITATION SERVICES.

    (a) In General.--Section 1833(g) (42 U.S.C. 1395l(g)) is amended by 
adding at the end the following:
    ``(4) Notwithstanding the preceding provisions of this subsection, 
for outpatient physical therapy services, outpatient occupational 
therapy services, and outpatient speech-language pathology services 
covered under this title and furnished on or after January 1, 2000, and 
before January 1, 2002, the Secretary shall implement a payment 
methodology based on the classification of individuals by diagnostic 
category, functional status, and prior use of services in both 
inpatient and outpatient settings.''.
    (b) Budget Neutrality in Implementation.--The payment methodology 
implemented under section 1833(g)(4) (42 U.S.C. 1395l(g)(4)), as added 
by subsection (a), shall be designed so that the methodology, taking 
into account the increased expenditures resulting from the 
implementation of such methodology, does not result in any increase or 
decrease in the expenditures under title XVIII of the Social Security 
Act on a fiscal year basis.

SEC. 402. MULTIYEAR TRANSITION TO PROSPECTIVE PAYMENT SYSTEM FOR 
              HOSPITAL OUTPATIENT DEPARTMENT SERVICES.

    (a) In General.--Section 1833(t) (42 U.S.C. 1395l(t)) is amended by 
adding at the end the following:
            ``(10) Multiyear transition.--
                    ``(A) In general.--In the case of covered OPD 
                services furnished by a hospital during a transition 
                year, the Secretary shall increase the payments for 
                such services under the prospective payment system 
                established under this subsection by the amount (if 
                any) which the Secretary determines necessary to ensure 
                that the payment to cost ratio of the hospital for the 
                transition year equals a ratio equal to the applicable 
                percentage of the payment to cost ratio of the hospital 
                for 1996.
                    ``(B) Payment to cost ratio.--
                            ``(i) In general.--The payment to cost 
                        ratio of a hospital for any year is the ratio 
                        which--
                                    ``(I) the hospital's reimbursement 
                                under this title for covered OPD 
                                services furnished during the year, 
                                including through cost-sharing 
                                described in subparagraph (D)(ii), 
                                bears to
                                    ``(II) the cost of such services.
                            ``(ii) Calculation of 1996 payment to cost 
                        ratio.--The Secretary shall determine each 
                        hospital's payment to cost ratio for 1996 as if 
                        the amendments made to this title by the 
                        provisions of section 4521 of the Balanced 
                        Budget Act of 1997 were in effect in 1996.
                            ``(iii) Transition years.--The Secretary 
                        shall estimate each payment to cost ratio of a 
                        hospital for any transition year before the 
                        beginning of such year.
                    ``(C) Interim payments.--
                            ``(i) In general.--The Secretary shall make 
                        interim payments to a hospital during any 
                        transition year for which the Secretary 
                        estimates a payment is required under 
                        subparagraph (A).
                            ``(ii) Adjustments.--If the Secretary makes 
                        payments under clause (i) for any transition 
                        year, the Secretary shall make retrospective 
                        adjustments to each hospital based on its 
                        settled cost report so that the amount of any 
                        additional payment to a hospital for such year 
                        equals the amount described in subparagraph 
                        (A).
                    ``(D) Definitions.--In this paragraph:
                            ``(i) Applicable percentage.--The term 
                        `applicable percentage' means, with respect to 
                        covered OPD services furnished during--
                                    ``(I) the first full year (and any 
                                portion of the immediately preceding 
                                year) for which the prospective payment 
                                system under this subsection is in 
                                effect, 95 percent;
                                    ``(II) the second full calendar 
                                year for which such system is in 
                                effect, 90 percent; and
                                    ``(III) the third full calendar 
                                year for which such system is in 
                                effect, 85 percent.
                            ``(ii) Cost-sharing.--The term `cost-
                        sharing' includes--
                                    ``(I) copayment amounts described 
                                in paragraph (5);
                                    ``(II) coinsurance described in 
                                section 1866(a)(2)(A)(ii); and
                                    ``(III) the deductible described 
                                under section 1833(b).
                            ``(iii) Transition year.--The term 
                        `transition year' means any year (or portion 
                        thereof) described in clause (i).
                    ``(E) Effect on copayments.--Nothing in this 
                paragraph shall be construed as affecting the 
                unadjusted copayment amount described in paragraph 
                (3)(B).
                    ``(F) Application without regard to budget 
                neutrality.--The transitional payments made under this 
                paragraph--
                            ``(i) shall not be considered an adjustment 
                        under paragraph (2)(E); and
                            ``(ii) shall not be implemented in a budget 
                        neutral manner.''.
    (b) Effective Date.--The amendments made by this section take 
effect as if included in the amendments made by section 4523 of the 
Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 445).

                  TITLE V--SKILLED NURSING FACILITIES

SEC. 501. MODIFICATION OF CASE MIX CATEGORIES FOR CERTAIN CONDITIONS.

    (a) In General.--For purposes of applying any formula under 
paragraph (1) of section 1888(e) of the Social Security Act (42 U.S.C. 
1395yy(e)), for services provided on or after October 1, 1999, and 
before the earlier of October 1, 2001, or the date described in 
subsection (c), the Secretary of Health and Human Services shall 
increase the adjusted Federal per diem rate otherwise determined under 
paragraph (4) of such section for services provided to any individual 
during the period in which such individual is in a RUG III category by 
the applicable payment add-on as determined in accordance with the 
following table:

RUG III category                               Applicable paymentadd-on
    SE3...........................................              $75.87 
    SE2...........................................              $65.70 
    SE1...........................................              $58.46 
    SSC...........................................              $57.15 
    SSB...........................................              $54.52 
    SSA...........................................              $53.21 
    CC2...........................................              $56.82 
    CC1...........................................              $52.55 
    CB2...........................................              $49.93 
    CB1...........................................              $47.62 
    CA2...........................................              $47.30 
    CA1...........................................              $44.67.
    (b) Update.--The Secretary shall adjust the applicable payment add-
on under subsection (a) for fiscal year 2001 by the skilled nursing 
facility market basket percentage change (as defined under section 
1888(e)(5)(B) of the Social Security Act (42 U.S.C. 1395yy(e)(5)(B))) 
applicable to such fiscal year.
    (c) Date Described.--The date described in this subsection is the 
date on which the Secretary of Health and Human Services implements a 
case mix methodology under section 1888(e)(4)(G)(i) of the Social 
Security Act (42 U.S.C. 1395yy(e)(4)(G)(i)) that takes into account 
adjustments for the provision of nontherapy ancillary services and 
supplies such as drugs and respiratory therapy.

SEC. 502. EXCLUSION OF AMBULANCE SERVICES TO AND FROM DIALYSIS 
              TREATMENTS AND PROSTHETIC SERVICES FROM THE PPS FOR SNFS.

    (a) In General.--The first sentence of section 1888(e)(2)(A)(ii) 
(42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting ``ambulance 
services furnished an individual in conjunction with a renal dialysis 
service, prosthetic and orthotic devices, including testing, fitting, 
or training in the use of prosthetic and orthotic devices,'' after 
``subparagraphs (F) and (O) of section 1861(s)(2),''.
    (b) Effective Date.--The amendment made by this section applies to 
services furnished on or after the date of enactment of this Act.

SEC. 503. WAIVER OF 3-DAY PRIOR HOSPITALIZATION REQUIREMENT FOR 
              COVERAGE OF SKILLED NURSING FACILITY SERVICES.

    (a) In General.--Not later than October 1, 2000, the Secretary of 
Health and Human Services (in this section referred to as the 
``Secretary'') shall provide for coverage under section 1812(f) of the 
Social Security Act (42 U.S.C. 1395d(f)) of extended care services (as 
defined in section 1861(h) of such Act (42 U.S.C. 1395x(h))) for 
individuals with a condition that is classifiable within a diagnosis-
related group identified under subsection (b).
    (b) Identification of DRGs.--For purposes of subsection (a) and 
subject to subsections (f) through (h), the diagnosis-related groups 
identified under this subsection are--
            (1) diagnosis-related group code 410 (relating to 
        chemotherapy without acute leukemia as secondary diagnosis); 
        and
            (2) the diagnosis-related groups described in subsections 
        (c) through (e).
    (c) Identification of DRGs Through a Medicare Select Study and 
Report.--
            (1) In general.--The diagnosis related groups described in 
        this subsection are those diagnosis-related groups identified 
        in the report submitted under paragraph (3) and determined to 
        reduce the total of payments made under the Medicare Program 
        under title XVIII of the Social Security Act (42 U.S.C. 1395 et 
        seq.) (in this section referred to as the ``Medicare 
        Program'').
            (2) Study.--
                    (A) In general.--The Secretary shall conduct a 
                study of extended care services provided in skilled 
                nursing facilities for which coverage is provided under 
                the Medicare select program under section 1882(t) of 
                the Social Security Act (42 U.S.C. 1395ss(t)) to obtain 
                data concerning--
                            (i) the length of stay of individuals in 
                        hospitals; and
                            (ii) extended care services provided to 
                        individuals in skilled nursing facilities.
                    (B) DRGs identified.--The study conducted under 
                subparagraph (A) shall include the identification of 
                those diagnosis-related groups that are generally 
                treated with less than a 3-day hospital stay under such 
                program.
            (3) Report.--Not later than January 1, 2001, the Secretary 
        shall submit to the appropriate committees of Congress a report 
        on the study conducted under paragraph (2) that shall include--
                    (A) a description of each diagnosis-related group 
                identified under subparagraph (B) of such paragraph; 
                and
                    (B) a determination as to whether waiving the 3-day 
                hospitalization stay requirement with respect to each 
                diagnosis-related group would reduce the total of 
                payments made under the Medicare Program.
    (d) Identification of DRGs Through Demonstration Programs.--
            (1) In general.--The diagnosis related groups described in 
        this subsection are those diagnosis-related groups identified 
        in the report submitted under paragraph (3) and determined to 
        reduce the total of payments made under the Medicare Program.
            (2) Demonstration programs.--
                    (A) Establishment.--The Secretary shall--
                            (i) establish demonstration programs under 
                        which the Secretary provides for coverage under 
                        section 1812(f) of the Social Security Act (42 
                        U.S.C. 1395d(f)) of extended care services for 
                        individuals with a condition that is 
                        classifiable within a diagnosis-related group 
                        identified by the Secretary under subparagraph 
                        (B) in the geographic areas selected under 
                        subparagraph (C); and
                            (ii) collect the data described in 
                        subparagraph (D).
                    (B) DRGs identified.--The Secretary shall identify 
                those diagnosis-related groups for which waiver of the 
                3-day hospitalization stay requirement is likely to 
                reduce the total of payments made under the Medicare 
                Program.
                    (C) Selection of geographic areas.--The geographic 
                areas selected under this subparagraph are those 
                geographic areas that the Secretary expects--
                            (i) to maximize the provision of 
                        appropriate statistically relevant data on the 
                        cost of--
                                    (I) extended care services provided 
                                in skilled nursing facilities; and
                                    (II) inpatient hospital services 
                                (as defined in section 1861(b) of the 
                                Social Security Act (42 U.S.C. 
                                1395x(b))); and
                            (ii) to minimize regional differences in 
                        the practice of medicine.
                    (D) Collection of data.--The Secretary shall 
                collect appropriate statistically relevant data on the 
                cost of extended care services and inpatient hospital 
                services provided--
                            (i) in the geographic areas selected under 
                        subparagraph (C)--
                                    (I) before the implementation of 
                                the demonstration programs under this 
                                subsection; and
                                    (II) after the implementation of 
                                such programs; and
                            (ii) in the geographic areas not selected 
                        under such subparagraph for the periods 
                        described in subclauses (I) and (II) of clause 
                        (i).
            (3) Report.--
                    (A) In general.--Not later than January 1, 2002, 
                the Secretary shall submit to the appropriate 
                committees of Congress a report--
                            (i) on the demonstration programs conducted 
                        under paragraph (2); and
                            (ii) comparing the effect of the waiver of 
                        3-day prior hospitalization requirement for 
                        coverage of extended care services--
                                    (I) among geographic areas; and
                                    (II) before and after the 
                                implementation of the programs 
                                established under paragraph (2).
                    (B) Contents.--The report submitted under 
                subparagraph (A) shall contain--
                            (i) a description of each diagnosis-related 
                        group for which a demonstration program is 
                        implemented under paragraph (2); and
                            (ii) a determination as to whether waiving 
                        the 3-day hospitalization stay requirement with 
                        respect to each diagnosis-related group would 
                        reduce the total of payments made under the 
                        Medicare Program.
                    (C) Consideration of data.--In preparing such 
                report, the Secretary shall consider the data collected 
                under paragraph (2)(D).
    (e) Identification of Additional DRGs.--The diagnosis related 
groups described in this subsection are those diagnosis-related groups 
not otherwise identified under this section that the Secretary 
determines would reduce the total of payments made under the Medicare 
Program if such diagnosis-related group were identified under 
subsection (b).
    (f) Requirement of Hospital Deductibles and Coinsurance.--
            (1) In general.--For purposes of this section, when the 
        requirement for a 3-day hospitalization stay has been waived 
        under this section, the Secretary shall require the application 
        of any deductibles and coinsurance under section 1813 of the 
        Social Security Act (42 U.S.C. 1395e) beginning with the first 
        day of extended care services provided in a skilled nursing 
        facility.
            (2) Reduction of amount.--The Secretary shall reduce the 
        amount of any deductible or coinsurance applied under this 
        subsection based on the best estimate of the Secretary of the 
        difference between the average cost of hospital inpatient 
        services for the individual involved and the average cost of 
        services provided to that individual in a skilled nursing 
        facility.
    (g) Recovery of Increased Payments.--If the Secretary determines 
that the application of this section in a fiscal year has resulted in 
any increase in the total of payments made under the Medicare Program 
for the fiscal year above the total of such payments that would have 
been made in the fiscal year if this section did not apply (taking into 
account any reduction in the total of payments made under such program 
as a result of the elimination of or a reduction in the length of 
hospitalization), the Secretary--
            (1) shall, notwithstanding any other provision of law, 
        provide for a reduction in the amounts otherwise payable under 
        part A of such title (42 U.S.C. 1395 et seq.) for post-hospital 
        extended care services (as defined in section 1861(i) of the 
        Social Security Act (42 U.S.C. 1395x(i))) in the following 
        fiscal year by such proportion as will reduce the total of 
        payments made in such fiscal year under such part by the total 
        amount of such an increase in the previous fiscal year; and
            (2) may rescind the selection of any diagnosis-related 
        group identified under subsection (b) if the application of 
        this section with respect to such group has resulted in an 
        increase in the total of payments made under the Medicare 
        Program.
    (h) Special Rule for Dual Eligibles.--In the case of an individual 
eligible for assistance for nursing facility services under title XIX 
of the Social Security Act (42 U.S.C. 1396 et seq.), the provisions of 
such title shall apply as if this section had not been enacted.

SEC. 504. EXTENSION OF CERTAIN MEDICARE COMMUNITY NURSING ORGANIZATION 
              DEMONSTRATION PROJECTS.

    Notwithstanding any other provision of law, demonstration projects 
conducted under section 4079 of the Omnibus Budget Reconciliation Act 
of 1987 may be conducted for an additional period of 5 years, and the 
deadline for any report required relating to the results of such 
projects shall be not later than 6 months before the end of such 
additional period.

             TITLE VI--COST-EFFICIENT HOME HEALTH PROVIDERS

SEC. 601. DELAY IN CONTINGENCY REDUCTION.

    (a) In General.--Section 4603(e) of the Balanced Budget Act of 1997 
(42 U.S.C. 1395fff note), as amended by section 5101(c)(3) of the Tax 
and Trade Relief Extension Act of 1998 (contained in division J of 
Public Law 105-277), is amended--
            (1) by striking ``described in subsection (d),'' and 
        inserting ``beginning on or after September 30, 2001''; and
            (2) by striking ``September 30, 2000'' and inserting 
        ``September 30, 2001''.
    (b) Effective Date.--The amendments made by this section take 
effect as if included in the enactment of the Balanced Budget Act of 
1997 (Public Law 105-33; 111 Stat. 251).

SEC. 602. ELIMINATION OF 15-MINUTE REPORTING REQUIREMENT.

    (a) In General.--Section 1895(c)(2) (42 U.S.C. 1395fff(c)(2)) is 
amended by striking ``, as measured in 15 minute increments''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect as if included in the amendments made by section 4603 of the 
Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 467).

SEC. 603. RECOUPMENT OF OVERPAYMENTS.

    (a) 36-Month Repayment Period.--
            (1) In general.--Except as provided in paragraph (2), in 
        the case of an overpayment by the Secretary of Health and Human 
        Services to a home health agency for home health services 
        furnished during a cost reporting period beginning on or after 
        October 1, 1997, as a result of payment limitations provided 
        for under clause (v), (vi), or (viii) of section 1861(v)(1)(L) 
        of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)), the home 
        health agency may elect to repay the amount of such overpayment 
        over a 36-month period beginning on the date of notification of 
        such overpayment.
            (2) Exception.--No home health agency may make an election 
        under paragraph (1) if any final adverse action (as defined in 
        section 1128E(g)(1) of such Act (42 U.S.C. 1320a-7e(g)(1))) has 
        been taken against such agency.
    (b) No Interest on Overpayment Amounts.--In the case of an agency 
that makes an election under subsection (a), no interest shall accrue 
on the outstanding balance of the amount of overpayment during such 36-
month period.
    (c) Termination.--No election under subsection (a) may be made for 
cost reporting periods (or portions thereof) beginning on or after the 
date of implementation of the prospective payment system for home 
health services under section 1895 of the Social Security Act (42 
U.S.C. 1395fff).
    (d) Effective Date.--The provisions of subsection (a) take effect 
as if included in the enactment of the Balanced Budget Act of 1997 
(Public Law 105-33; 111 Stat. 251).

SEC. 604. INCREASE IN PER VISIT LIMIT.

    Section 1861(v)(1)(L)(i) (42 U.S.C. 1395x(v)(1)(L)(i)), as amended 
by section 5101(b) of the Tax and Trade Relief Extension Act of 1998 
(contained in division J of Public Law 105-277), is amended--
            (1) in subclause (IV), by striking ``or'';
            (2) in subclause (V)--
                    (A) by inserting ``and before October 1, 1999,'' 
                after ``October 1, 1998,''; and
                    (B) by striking the period and inserting ``, or''; 
                and
            (3) by adding at the end the following:
            ``(VI) October 1, 1999, 112 percent of such median.''.

TITLE VII--MEDICARE+CHOICE AND MEDIGAP PROTECTIONS FOR SENIORS AND THE 
                                DISABLED

SEC. 701. TWO-YEAR MEDICARE+CHOICE TRIAL PERIOD.

    (a) In General.--Section 1882(s)(3)(B) (42 U.S.C. 1395ss(s)(3)(B)) 
is amended--
            (1) in clause (v)(III), by striking ``12'' and inserting 
        ``24''; and
            (2) in clause (vi), by striking ``12'' and inserting 
        ``24''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to terminations and discontinuations occurring on or after the date of 
enactment of this Act.

SEC. 702. PERMITTING ENROLLMENT IN ALTERNATIVE PLANS UPON RECEIPT OF 
              NOTICE OF MEDICARE+CHOICE PLAN TERMINATION.

    (a) Medicare+Choice Plans.--Section 1851(e)(4) (42 U.S.C. 1395w-
21(e)(4)) is amended by striking subparagraph (A) and inserting the 
following:
                    ``(A)(i) the certification of the organization or 
                plan under this part has been terminated, or the 
                organization or plan has notified the individual of an 
                impending termination of such certification; or
                    ``(ii) the organization has terminated or otherwise 
                discontinued providing the plan in the area in which 
                the individual resides, or has notified the individual 
                of an impending termination or discontinuation of such 
                plan;''.
    (b) Medigap Plans.--
            (1) In general.--Section 1882(s)(3)(A) (42 U.S.C. 
        1395ss(s)(3)(A)) is amended in the matter following clause 
        (iii)--
                    (A) by inserting ``(92 days in the case of a 
                termination or discontinuation of coverage under the 
                types of circumstances described in section 
                1851(e)(4)(A))'' after ``63 days'';
                    (B) by inserting ``(or, if elected by the 
                individual, the date of notification of the individual 
                by the plan or organization of the impending 
                termination or discontinuance of the plan in the area 
                in which the individual resides)'' after ``the date of 
                the termination of enrollment described in such 
                subparagraph''; and
                    (C) by inserting ``(or date of such notification)'' 
                after ``the date of termination or disenrollment''.
            (2) Effective date.--The amendments made by this subsection 
        apply to notices of intended termination made by group health 
        plans and Medicare+Choice organizations after the date of 
        enactment of this Act.

SEC. 703. GUARANTEED ISSUANCE OF CERTAIN MEDIGAP POLICIES IN CASES OF A 
              SUBSTANTIAL CHANGE IN BENEFITS UNDER A MEDICARE+CHOICE 
              PLAN.

    (a) In General.--Section 1851(e)(4)(C) (42 U.S.C. 1395w-
21(e)(4)(C)) is amended--
            (1) in clause (i), by striking ``or'' at the end; and
            (2) by adding at the end the following:
                            ``(iii) the organization offering the plan 
                        substantially changed the benefits offered 
                        under the plan in which the individual 
                        enrolled; or''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to terminations and discontinuations occurring on or after the date of 
enactment of this Act.

SEC. 704. GUARANTEED ISSUANCE OF CERTAIN MEDIGAP POLICIES TO DISABLED 
              MEDICARE+CHOICE DISENROLLEES.

    (a) In General.--Section 1882(s)(3)(C) (42 U.S.C. 1395ss(s)(3)(C)) 
is amended by adding at the end the following:
    ``(E) For purposes of this paragraph, in the case of an individual 
otherwise described in subparagraph (B)(v) except that such individual 
is under age 65, such individual shall be deemed to be an individual 
described in such subparagraph''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to terminations and discontinuations occurring on or after the date of 
enactment of this Act.

SEC. 705. ISSUANCE OF SAME MEDIGAP BENEFIT PACKAGE GUARANTEED FOR 
              CERTAIN MEDICARE+CHOICE DISENROLLEES.

    (a) In General.--Section 1882(s)(3)(C)(ii) (42 U.S.C. 
1395ss(s)(3)(C)(ii)) is amended by striking ``, if available from the 
same issuer, or, if not so available,'' and inserting ``or, if not 
available,''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to terminations and discontinuations occurring on or after the date of 
enactment of this Act.

SEC. 706. PROHIBITION OF ATTAINED-AGE RATING OF PREMIUMS FOR MEDIGAP 
              POLICIES.

    Section 1882 (42 U.S.C. 1395ss) is amended by adding at the end the 
following:
    ``(v)(1) A Medicare supplemental policy may not be issued or 
renewed (or otherwise provide coverage after the deadline established 
under paragraph (2)) in any State unless the premiums for the policy do 
not increase for an individual under the policy based on the aging of 
the individual.
    ``(2) The requirement of paragraph (1) shall apply to premiums for 
policies under a timetable, recognized by the Secretary, that provides 
for an appropriate phase-in of such requirement. The Secretary shall 
recognize as the timetable such timetable as the National Association 
of Insurance Commissioners may recommend to the Secretary within 9 
months after the date of enactment of this subsection.''.

       TITLE VIII--MEDICARE PRESERVATION THROUGH FRAUD PREVENTION

SEC. 801. SITE INSPECTIONS AND BACKGROUND CHECKS.

    (a) Site Inspections for DME Suppliers, Community Mental Health 
Centers, and Other Provider Groups.--Title XVIII (42 U.S.C. 1395 et 
seq.) is amended by adding at the end the following:

``site inspections for dme suppliers, community mental health centers, 
                       and other provider groups

    ``Sec. 1897. (a) Site Inspections.--
            ``(1) In general.--The Secretary shall conduct a site 
        inspection for each applicable provider (as defined in 
        paragraph (2)) that applies for a provider number in order to 
        provide items or services under this title. Such site 
        inspection shall be in addition to any other site inspection 
        that the Secretary would otherwise conduct with regard to an 
        applicable provider.
            ``(2) Applicable provider defined.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in this section, the term `applicable 
                provider' means--
                            ``(i) a supplier of durable medical 
                        equipment (including items described in section 
                        1834(a)(13));
                            ``(ii) a supplier of prosthetics, 
                        orthotics, or supplies (including items 
                        described in paragraphs (8) and (9) of section 
                        1861(s));
                            ``(iii) a community mental health center; 
                        or
                            ``(iv) any other provider group, as 
                        determined by the Secretary.
                    ``(B) Exception.--In this section, the term 
                `applicable provider' does not include--
                            ``(i) a physician that provides durable 
                        medical equipment (as so described) or 
                        prosthetics, orthotics, or supplies (as so 
                        described) to an individual as incident to an 
                        office visit by such individual; or
                            ``(ii) a hospital that provides durable 
                        medical equipment (as described in subparagraph 
                        (A)(i)) or prosthetics, orthotics, or supplies 
                        (as described in subparagraph (A)(ii)) to an 
                        individual as incident to an emergency room 
                        visit by such individual.
    ``(b) Standards and Requirements.--In conducting the site 
inspection pursuant to subsection (a), the Secretary shall ensure that 
the site being inspected is in full compliance with all the conditions 
and standards of participation and requirements for obtaining Medicare 
billing privileges under this title.
    ``(c) Time.--The Secretary shall conduct the site inspection for an 
applicable provider prior to the issuance of a provider number to such 
provider.
    ``(d) Timely Review.--The Secretary shall provide for procedures to 
ensure that the site inspection required under this section does not 
unreasonably delay the issuance of a provider number to an applicable 
provider.''.
    (b) Background Checks.--Title XVIII (42 U.S.C. 1395 et seq.) (as 
amended by subsection (a)) is amended by adding at the end the 
following:

                          ``background checks

    ``Sec. 1898. (a) Background Check Required.--Except as provided in 
subsection (b), the Secretary shall conduct a background check on any 
individual or entity that applies to the Secretary for a provider 
number for the purpose of furnishing any item or service under this 
title. In performing the background check, the Secretary shall--
            ``(1) conduct the background check before issuing a 
        provider number to an individual or entity;
            ``(2) include a search of criminal records in the 
        background check; and
            ``(3) provide for procedures that ensure the background 
        check does not unreasonably delay the issuance of a provider 
        number to an eligible individual or entity.
    ``(b) Use of State Licensing Procedure.--The Secretary may use the 
results of a State licensing procedure as a background check under 
subsection (a) if the State licensing procedure meets the requirements 
of subsection (a).
    ``(c) Attorney General Required To Provide Information.--
            ``(1) In general.--Upon request of the Secretary, the 
        Attorney General shall provide the criminal background check 
        information referred to in subsection (a)(2) to the Secretary.
            ``(2) Restriction on use of disclosed information.--The 
        Secretary may only use the information disclosed under 
        subsection (a) for the purpose of carrying out the Secretary's 
        responsibilities under this title.
    ``(d) Refusal To Issue Provider Number.--
            ``(1) Authority.--In addition to any other remedy available 
        to the Secretary, the Secretary may refuse to issue a provider 
        number to an individual or entity if the Secretary determines, 
        after a background check conducted under this section, that 
        such individual or entity has a history of acts that indicate 
        issuance of a provider number to such individual or entity 
        would be detrimental to the best interests of the program or 
        program beneficiaries. Such acts may include, but are not 
        limited to--
                    ``(A) any bankruptcy;
                    ``(B) any act resulting in a civil judgment against 
                such individual or entity; or
                    ``(C) any felony conviction under Federal or State 
                law.
            ``(2) Reporting of refusal to issue provider number to the 
        health integrity protection database (hipdb).--A determination 
        to refuse to issue a provider number to an individual or entity 
        as a result of a background check conducted under this section 
        shall be reported to the health integrity protection database 
        established under section 1128E in accordance with the 
        procedures for reporting final adverse actions taken against a 
        health care provider, supplier, or practitioner under that 
        section.''.
    (c) Regulations; Effective Date.--
            (1) Regulations.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of Health and Human 
        Services shall promulgate such regulations as are necessary to 
        implement the amendments made by subsections (a) and (b).
            (2) Effective date.--The amendments made by subsections (a) 
        and (b) apply to applications received by the Secretary of 
        Health and Human Services on or after January 1, 2000.
    (d) Use of Medicare Integrity Program Funds.--The Secretary of 
Health and Human Services may use funds appropriated or transferred for 
purposes of carrying out the Medicare integrity program established 
under section 1893 of the Social Security Act (42 U.S.C. 1395ddd) to 
carry out the provisions of sections 1897 and 1898 of that Act (as 
added by subsections (a) and (b)).

SEC. 802. REGISTRATION OF BILLING AGENCIES.

    (a) Registration of Billing Agencies and Individuals.--Title XVIII 
(42 U.S.C. 1395 et seq.) (as amended by section 801(b)) is amended by 
adding at the end the following:

           ``registration of billing agencies and individuals

    ``Sec. 1899. (a) Registration.--The Secretary shall establish 
procedures for the registration of all applicable persons.
    ``(b) Required Application.--Each applicable person shall submit a 
registration application to the Secretary at such time, in such manner, 
and accompanied by such information as the Secretary may require.
    ``(c) Identification Number.--If the Secretary approves an 
application submitted under subsection (b), the Secretary shall assign 
a unique identification number to the applicable person.
    ``(d) Requirement.--Every claim for reimbursement under this title 
that is compiled and submitted by an applicable person shall contain 
the identification number that is assigned to the applicable person 
pursuant to subsection (c).
    ``(e) Timely Review.--The Secretary shall provide for procedures 
that ensure the timely consideration and determination regarding 
approval of applications under this section.
    ``(f) Definition of Applicable Person.--In this section, the term 
`applicable person' means an individual or an entity that compiles and 
submits claims for reimbursement under this title to the Secretary on 
behalf of any individual or entity.''.
    (b) Permissive Exclusion.--Section 1128(b) (42 U.S.C. 1320a-7(b)) 
is amended by adding at the end the following:
            ``(16) Fraud by applicable person.--An applicable person 
        (as defined in section 1899(f)) that the Secretary determines 
        knowingly submitted or caused to be submitted a claim for 
        reimbursement under title XVIII that the applicable person 
        knows or should know is false or fraudulent.''.
    (c) Regulations; Effective Date.--
            (1) Regulations.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of Health and Human 
        Services shall promulgate such regulations as are necessary to 
        implement the amendments made by subsections (a) and (b).
            (2) Effective date.--The amendments made by subsections (a) 
        and (b) take effect on January 1, 2000.

SEC. 803. EXPANDED ACCESS TO THE HEALTH INTEGRITY PROTECTION DATABASE 
              (HIPDB).

    (a) In General.--Section 1128E(d)(1) (42 U.S.C. 1320a-7e(d)(1)) is 
amended to read as follows:
            ``(1) Availability.--The information in the database 
        maintained under this section shall be available to--
                    ``(A) Federal and State government agencies and 
                health plans, and any health care provider, supplier, 
                or practitioner entering an employment or contractual 
                relationship with an individual or entity who could 
                potentially be the subject of a final adverse action, 
                in any case in which the contract involves the 
                furnishing of items or services reimbursed by 1 or more 
                Federal health care programs (regardless of whether the 
                individual or entity is paid by the programs directly, 
                or whether the items or services are reimbursed 
                directly or indirectly through the claims of a direct 
                provider); and
                    ``(B) utilization and quality control peer review 
                organizations and accreditation entities as defined by 
                the Secretary, including but not limited to 
                organizations described in part B of this title and in 
                section 1154(a)(4)(C).''.
    (b) Criminal Penalty for Misuse of Information.--Section 1128B(b) 
(42 U.S.C. 1320a-7b(b)) is amended by adding at the end the following:
    ``(4) Whoever knowingly uses information maintained in the health 
integrity protection database maintained in accordance with section 
1128E for a purpose other than a purpose authorized under that section 
shall be imprisoned for not more than 3 years or fined under title 18, 
United States Code, or both.''.
    (c) Effective Dates.--
            (1) Availability.--The amendment made by subsection (a) 
        takes effect on the date of enactment of this Act.
            (2) Criminal penalty for misuse of information.--The 
        amendment made by subsection (b) takes effect on the date of 
        enactment of this Act and applies to acts committed on or after 
        the date of enactment of this Act.

SEC. 804. LIABILITY OF MEDICARE CARRIERS AND FISCAL INTERMEDIARIES FOR 
              CLAIMS SUBMITTED BY EXCLUDED PROVIDERS.

    (a) Reimbursement to the Secretary for Amounts Paid to Excluded 
Providers.--
            (1) Requirements for fiscal intermediaries.--
                    (A) In general.--Section 1816 (42 U.S.C. 1395h) is 
                amended by adding at the end the following:
    ``(m) An agreement with an agency or organization under this 
section shall require that such agency or organization reimburse the 
Secretary for any amounts paid by the agency or organization for a 
service under this title which is furnished by an individual or entity 
during any period for which the individual or entity is excluded, 
pursuant to section 1128, 1128A, or 1156, from participation in the 
health care program under this title if the amounts are paid to the 
individual or entity excluded from participation--
            ``(1) after the 60-day period beginning on the date the 
        Secretary provides notice of the exclusion to the agency or 
        organization, unless the payment was made as a result of 
        incorrect information provided by the Secretary; or
            ``(2) which has concealed or altered their identity.''.
                    (B) Conforming amendment.--Section 1816(i) (42 
                U.S.C. 1395h(i)) is amended by adding at the end the 
                following:
            ``(4) Nothing in this subsection shall be construed to 
        prohibit reimbursement by an agency or organization pursuant to 
        subsection (m).''.
            (2) Requirements for carriers.--Section 1842(b)(3) (42 
        U.S.C. 1395u(b)(3)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (I); and
                    (B) by inserting after subparagraph (I) the 
                following:
            ``(J) will reimburse the Secretary for any amounts paid by 
        the carrier for an item or service under this part which is 
        furnished by an individual or entity during any period for 
        which the individual or entity is excluded, pursuant to section 
        1128, 1128A, or 1156, from participation in the health care 
        program under this title if the amounts are paid to the 
        individual or entity excluded from participation--
                    ``(1) after the 60-day period beginning on the date 
                the Secretary provides notice of the exclusion to the 
                agency or organization, unless the payment was made as 
                a result of incorrect information provided by the 
                Secretary; or
                    ``(2) which has concealed or altered their 
                identity; and''.
    (b) Conforming Repeal of Mandatory Payment Rule.--Section 1862(e) 
(42 U.S.C. 1395y(e)) is amended--
            (1) in paragraph (1)(B), by striking ``and when the 
        person'' and all that follows through ``person)''; and
            (2) by amending paragraph (2) to read as follows:
    ``(2) No individual or entity may bill (or collect any amount from) 
any individual for any item or service for which payment is denied 
under paragraph (1). No individual is liable for payment of any amounts 
billed for such an item or service in violation of the preceding 
sentence.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section apply 
        to claims for payment submitted on or after the date of 
        enactment of this Act.
            (2) Contract modification.--The Secretary of Health and 
        Human Services shall take such steps as may be necessary to 
        modify contracts and agreements entered into, renewed, or 
        extended prior to the date of enactment of this Act to conform 
        such contracts or agreements to the provisions of this section.

SEC. 805. COMMUNITY MENTAL HEALTH CENTERS.

    (a) In General.--Section 1861(ff)(3)(B) (42 U.S.C. 1395x(ff)(3)(B)) 
is amended by striking ``entity'' and all that follows and inserting 
the following: ``entity that--
            ``(i) provides the community mental health services 
        specified in paragraph (1) of section 1913(c) of the Public 
        Health Service Act;
            ``(ii) meets applicable certification or licensing 
        requirements for community mental health centers in the State 
        in which it is located;
            ``(iii) provides a significant share of its services to 
        individuals who are not eligible for benefits under this title; 
        and
            ``(iv) meets such additional standards or requirements for 
        obtaining Medicare billing privileges as the Secretary may 
        specify to ensure--
                    ``(I) the health and safety of beneficiaries 
                receiving such services; or
                    ``(II) the furnishing of such services in an 
                effective and efficient manner.''.
    (b) Restriction.--Section 1861(ff)(3)(A) (42 U.S.C. 
1395x(ff)(3)(A)) is amended by inserting ``other than in an 
individual's home or in an inpatient or residential setting'' before 
the period.
    (c) Effective Date.--The amendments made by this section apply to 
items and services furnished after the sixth month that begins after 
the date of enactment of this Act.

SEC. 806. LIMITING THE DISCHARGE OF DEBTS IN BANKRUPTCY PROCEEDINGS IN 
              CASES WHERE A HEALTH CARE PROVIDER OR A SUPPLIER ENGAGES 
              IN FRAUDULENT ACTIVITY.

    (a) In General.--
            (1) Civil monetary penalties.--Section 1128A(a) (42 U.S.C. 
        1320a-7a(a)) is amended by adding at the end the following: 
        ``Notwithstanding any other provision of law, amounts made 
        payable under this section are not dischargeable under section 
        727, 1141, 1228 (a) or (b), or 1328 of title 11, United States 
        Code, or any other provision of such title.''.
            (2) Recovery of overpayment to providers of services under 
        part a of medicare.--Section 1815(d) (42 U.S.C. 1395g(d)) is 
        amended--
                    (A) by inserting ``(1)'' after ``(d)''; and
                    (B) by adding at the end the following:
    ``(2) Notwithstanding any other provision of law, amounts due to 
the Secretary under this section are not dischargeable under section 
727, 1141, 1228 (a) or (b), or 1328 of title 11, United States Code, or 
any other provision of such title if the overpayment was the result of 
fraudulent activity, as may be defined by the Secretary.''.
            (3) Recovery of overpayment of benefits under part b of 
        medicare.--Section 1833(j) (42 U.S.C. 1395l(j)) is amended--
                    (A) by inserting ``(1)'' after ``(j)''; and
                    (B) by adding at the end the following:
    ``(2) Notwithstanding any other provision of law, amounts due to 
the Secretary under this section are not dischargeable under section 
727, 1141, 1228 (a) or (b), or 1328 of title 11, United States Code, or 
any other provision of such title if the overpayment was the result of 
fraudulent activity, as may be defined by the Secretary.''.
            (4) Collection of past-due obligations arising from breach 
        of scholarship and loan contract.--Section 1892(a) (42 U.S.C. 
        1395ccc(a)) is amended by adding at the end the following:
            ``(5) Notwithstanding any other provision of law, amounts 
        due to the Secretary under this section are not dischargeable 
        under section 727, 1141, 1228 (a) or (b), or 1328 of title 11, 
        United States Code, or any other provision of such title.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
bankruptcy petitions filed after the date of enactment of this Act.

SEC. 807. ILLEGAL DISTRIBUTION OF A MEDICARE OR MEDICAID BENEFICIARY 
              IDENTIFICATION OR PROVIDER NUMBER.

    (a) In General.--Section 1128B(b) (42 U.S.C. 1320a-7b(b)), as 
amended by section 803(b), is amended by adding at the end the 
following:
    ``(5) Whoever knowingly, intentionally, and with the intent to 
defraud purchases, sells or distributes, or arranges for the purchase, 
sale, or distribution of 2 or more Medicare or Medicaid beneficiary 
identification numbers or provider numbers shall be imprisoned for not 
more than 3 years or fined under title 18, United States Code (or, if 
greater, an amount equal to the monetary loss to the Federal and any 
State government as a result of such acts), or both.''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on the date of enactment of this Act and applies to acts 
committed on or after the date of enactment of this Act.

SEC. 808. TREATMENT OF CERTAIN SOCIAL SECURITY ACT CRIMES AS FEDERAL 
              HEALTH CARE OFFENSES.

    (a) In General.--Section 24(a) of title 18, United States Code, is 
amended--
            (1) by striking the period at the end of paragraph (2) and 
        inserting ``; or''; and
            (2) by adding at the end the following:
            ``(3) section 1128B of the Social Security Act (42 U.S.C. 
        1320a-7b).''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on the date of enactment of this Act and applies to acts 
committed on or after the date of enactment of this Act.

SEC. 809. AUTHORITY OF OFFICE OF INSPECTOR GENERAL OF THE DEPARTMENT OF 
              HEALTH AND HUMAN SERVICES.

    (a) Authority.--Notwithstanding any other provision of law, upon 
designation by the Inspector General of the Department of Health and 
Human Services, any criminal investigator of the Office of Inspector 
General of such department may, in accordance with guidelines issued by 
the Secretary of Health and Human Services and approved by the Attorney 
General, while engaged in activities within the lawful jurisdiction of 
such Inspector General--
            (1) obtain and execute any warrant or other process issued 
        under the authority of the United States;
            (2) make an arrest without a warrant for--
                    (A) any offense against the United States committed 
                in the presence of such investigator; or
                    (B) any felony offense against the United States, 
                if such investigator has reasonable cause to believe 
                that the person to be arrested has committed or is 
                committing that felony offense; and
            (3) exercise any other authority necessary to carry out the 
        authority described in paragraphs (1) and (2).
    (b) Funds.--The Office of Inspector General of the Department of 
Health and Human Services may receive and expend funds that represent 
the equitable share from the forfeiture of property in investigations 
in which the Office of Inspector General participated, and that are 
transferred to the Office of Inspector General by the Department of 
Justice, the Department of the Treasury, or the United States Postal 
Service. Such equitable sharing funds shall be deposited in a separate 
account and shall remain available until expended.

SEC. 810. UNIVERSAL PRODUCT NUMBERS ON CLAIMS FORMS FOR REIMBURSEMENT 
              UNDER THE MEDICARE PROGRAM.

    (a) UPNs on Claims Forms for Reimbursement Under the Medicare 
Program.--
            (1) Accommodation of upns on medicare claims forms.--Not 
        later than February 1, 2001, all claims forms developed or used 
        by the Secretary of Health and Human Services for reimbursement 
        under the Medicare Program under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.) shall accommodate the use 
        of universal product numbers for a UPN covered item.
            (2) Requirement for payment of claims.--Title XVIII (42 
        U.S.C. 1395 et seq.) (as amended by section 802(a)) is amended 
        by adding at the end the following:

                   ``use of universal product numbers

    ``Sec. 1899A. (a) In General.--No payment shall be made under this 
title for any claim for reimbursement for any UPN covered item unless 
the claim contains the universal product number of the UPN covered 
item.
    ``(b) Definitions.--In this section:
            ``(1) UPN covered item.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `UPN covered item' means--
                            ``(i) a covered item (as defined in section 
                        1834(a)(13));
                            ``(ii) an item described in paragraph (8) 
                        or (9) of section 1861(s);
                            ``(iii) an item described in paragraph (5) 
                        of section 1861(s); and
                            ``(iv) any other item for which payment is 
                        made under this title that the Secretary 
                        determines to be appropriate.
                    ``(B) Exclusion.--The term `UPN covered item' does 
                not include a customized item for which payment is made 
                under this title.
            ``(2) Universal product number.--The term `universal 
        product number' means a number that is--
                    ``(A) affixed by the manufacturer to each 
                individual UPN covered item that uniquely identifies 
                the item at each packaging level; and
                    ``(B) based on commercially acceptable 
                identification standards, such as standards established 
                by the Uniform Code Council-International Article 
                Numbering System or the Health Industry Business 
                Communication Council.''.
            (3) Development and implementation of procedures.--
                    (A) Information included in upn.--The Secretary of 
                Health and Human Services, in consultation with 
                manufacturers and entities with appropriate expertise, 
                shall determine the relevant descriptive information 
                appropriate for inclusion in a universal product number 
                for a UPN covered item.
                    (B) Review of procedure.--From the information 
                obtained by the use of universal product numbers on 
                claims for reimbursement under the Medicare Program 
                under title XVIII of the Social Security Act (42 U.S.C. 
                1395 et seq.), the Secretary of Health and Human 
                Services, in consultation with interested parties, 
                shall periodically review the UPN covered items billed 
                under the Health Care Financing Administration Common 
                Procedure Coding System and adjust such coding system 
                to ensure that functionally equivalent UPN covered 
                items are billed and reimbursed under the same codes.
            (4) Effective date.--The amendment made by paragraph (2) 
        applies to claims for reimbursement submitted on and after 
        February 1, 2002.
    (b) Study and Reports to Congress.--
            (1) Study.--The Secretary of Health and Human Services 
        shall conduct a study on the results of the implementation of 
        the provisions in paragraphs (1) and (3) of subsection (a) and 
        the amendment to the Social Security Act in paragraph (2) of 
        that subsection.
            (2) Reports.--
                    (A) Progress report.--Not later than 6 months after 
                the date of enactment of this Act, the Secretary of 
                Health and Human Services shall submit a report to the 
                appropriate committees of Congress that contains a 
                detailed description of the progress of the matters 
                studied pursuant to paragraph (1).
                    (B) Implementation.--Not later than 18 months after 
                the date of enactment of this Act, and annually 
                thereafter for 3 years, the Secretary of Health and 
                Human Services shall submit a report to the appropriate 
                committees of Congress that contains a detailed 
                description of the results of the study conducted 
                pursuant to paragraph (1), together with the 
                Secretary's recommendations regarding the use of 
                universal product numbers and the use of data obtained 
                from the use of such numbers.
    (c) Definitions.--In this section:
            (1) UPN covered item.--The term ``UPN covered item'' has 
        the meaning given such term in section 1899A(b)(1) of the 
        Social Security Act (as added by subsection (a)(2)).
            (2) Universal product number.--The term ``universal product 
        number'' has the meaning given such term in section 1899A(b)(2) 
        of the Social Security Act (as added by subsection (a)(2)).
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for the purpose of carrying 
out the provisions in paragraphs (1) and (3) of subsection (a), 
subsection (b), and section 1899A of the Social Security Act (as added 
by subsection (a)(2)).
                                 <all>